More On "Erroneous" Government Data - So What!

By: Harry J. Clawar | Sat, Oct 25, 2003
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This article was originally published at Gold-Eagle

A while ago I posted an article that dealt with an unusual pattern of 7 out of 8 adjustments to the initial claims data being in the direction of negative news for the labor market. I pointed out the low probability of this being a chance phenomenon, and mentioned that I would follow it for a while longer before concluding it was in fact not a chance phenomenon. Well gaze upon a full quarters data (13 weeks) in Table 1. With only one exception, the initial report underestimates the severity of unemployment claims. The probability of seeing 12 or more reports in the same direction by chance is only about 17 in 10,000. Something is going on with their reporting system!

If you add this preliminary information about the "errors" in reporting economic data to the rather large base of information concerning the manipulation of previous metals markets you've got a rather odious concoction.

Table 1
Initial Claims
Date of Correction Actual Prior
Week's Claims
Prior Week's
First Report
Under(-)/Over(+)
Estimate
07/31/03 391000 386000 -5000
08/07/03 393000 388000 -5000
08/14/03 396000 390000 -6000
08/21/03 403000 396000 -7000
08/28/03 391000 386000 -5000
09/04/03 394000 398000  4000
09/11/03 419000 413000 -6000
09/18/03 428000 422000 -6000
09/25/03 400000 399000 -1000
10/02/03 386000 381000 -5000
10/09/03 405000 399000 -6000
10/16/03 388000 382000 -6000
10/23/03 390000 384000 -6000
Average  =   -4615

Some suggest that if only the information about erroneous economic statistics and manipulated precious metal markets were made public then the people would demand the political changes necessary to "fix" these items. Maybe that is so, but at least two underlying causes of these factors would not be solved and would just give rise to alternative subterfuges and confabulations. What are those underlying factors?

1. Through our educational system, the media, and the political class a belief has been instilled in the populace that you can have personal freedom without economic freedom. Much has been written about this fallacy and I shall not dwell on it here.

2. A manipulation of the tax system has been engineered so that a pro big-government, pro-big taxation majority has been created. The major economic support for this majority is a tax system, so far in the Marxian direction of "to each according to his needs from each according to his ability", that the most productive minority is a permanent and increasing prey to the rest of society. This verbal description is made more concrete by the following statistics of a few years ago:

Table 2
Comparison of Percent of Income Earned
& Percent of Federal Income Tax Burden
Income % of Federal Tax Burden % of All Earned
Top 1% of earners 37.4% 20.8%
Top 10% of earners 67.0% 46.0%
Bottom 50% of earners <4.0% 14.0%

You can see from the extremely skewed distribution of tax burden among the three groupings represented that the government, through its tax law creation, has produced a majority of people who pay virtually no Federal Income Tax. This is a majority of the population who has a vested interest in keeping the government big, expropriating income from the producers, and maintaining many "programs" for them. This is a group that has been schooled and induced into valuing security over freedom. With the label "entitlement" fastened to an ever more numerous, and individually larger set of programs, they assume a right to the fruits of another's labor. Individuals who have been conditioned to value the economic liberty of others so lightly will not call for the government changes necessary regardless of the stories about market manipulation, fiat currency theft and "erroneous" economic data reporting. This is a task that might well be beyond an educational and media system so damaged with respect to understanding individual liberty as it was spelled out in the Constitution and Bill of Rights.


 

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